Burnham Pledges 20% Business Rates Cut for Pubs in Leadership Pitch
Greater Manchester Mayor Andy Burnham has put the licensed on-trade at the centre of his political ambitions, vowing to slash business rates for pubs by 20 per cent should he succeed Sir Keir Starmer as Prime Minister.
The pledge, which forms the opening salvo of what amounts to an unofficial Labour leadership campaign, will be welcomed by an embattled hospitality sector that has faced mounting cost pressures since the current government took office in July 2024.
Speaking ahead of his campaign for the Makerfield parliamentary seat — a contest widely seen as a springboard for a future leadership bid — Burnham acknowledged that his own party had misjudged the impact of recent tax changes on small and independent businesses.
“Our high streets matter to me because they matter to the people who live here,” he said. “I want to make sure that these family-owned businesses, as the heart and soul of this country, are protected and given the chance to thrive.”
In a striking departure from government messaging, Burnham conceded that Labour had got its economic policy wrong when it comes to smaller operators, stating plainly that his party had “undervalued the contribution these businesses make to our livelihoods and our communities.”
The comments will resonate strongly within the on-trade, which has been vocal in its criticism of Chancellor Rachel Reeves’s November decision to increase employer National Insurance contributions — a move compounded by a simultaneous rise in the national minimum wage.
Operators across the pub and hospitality sector have repeatedly warned that the twin burden is making recruitment and retention increasingly difficult, with some reporting they have been forced to cut staff hours or reduce headcount altogether.
What Burnham is proposing
Under Burnham’s outline proposals, pubs would benefit from a 20 per cent reduction in business rates from 2027-28, at an estimated cost to the Treasury of around £100 million.
This would go significantly further than the government’s own announced 15 per cent relief for 2026-27, and would counteract the current plan — set out by the Chancellor — under which pub rates are due to rise in line with inflation between 2027 and 2029.
Cafés, independent shops and hairdressers would go further still under his plans, with Burnham pledging to abolish business rates for those operators entirely.
The Mayor is also proposing structural reform to the rates system itself. The threshold at which businesses begin paying rates has been frozen at £12,000 since April 2017 — meaning successive property revaluations have drawn more operators into liability.
Burnham would raise that floor to £18,000 and extend a tapered relief band to £21,000, offering meaningful breathing room to smaller venues and sole traders who currently sit just above the exemption line.
Emma McClarkin, chief executive of the British Beer and Pub Association, said: “While the current relief in business rates for pubs is welcome, pubs continue to pay a disproportionately higher rate which grinds down their ability to keep the doors open.
“A further 20 per cent would be a real boost for the local, and raising the threshold so many smaller pubs get taken out of paying rates would make a real difference to high streets and livelihoods.
“We know how much people value the pub, and we want to work with all parties on long term reform so our pubs stay open, young people stay in jobs, and the local remains at the heart of the community.”
Allen Simpson, Chief Executive of UKHospitality, said: “It’s right to recognise that high street hospitality businesses are the heart and soul of Britain and, crucially, that the system is broken and in need of reform.
“The challenges facing local businesses are universal and affect all types of venue, from pubs and restaurants to cafés and hotels. An effective high street strategy needs to deliver a hospitality-wide solution to deliver for all businesses, high streets, towns, cities and communities.
“To reverse the trend of closures and lost jobs into openings and new jobs, that strategy needs to include a plan for delivering lower business rates and a 10% rate of VAT for hospitality.
“We continue to have discussions with government about business rates bills for the next two years of this current cycle and continue to have positive conversations with all major parties about business rates across England, Scotland and Wales.”